Pru profit boosted as Thiam takes on top role
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Prudential chief executive Mark Tucker is to step down in September after last week revealing a profit increase of 17 per cent in the firm's preliminary results for 2008.
Tucker will be succeeded by group financial officer Tidjane Thiam, who is set to become the FTSE 100's first black chief executive. Tucker has been at the Pru for 25 years and has been CEO for the past four years. He has not revealed his future plans although he said in a conference call last Thursday that he has "one more big job" in him. Tucker says he is resigning, having done all he set out to achieve in the role and rejected speculation that he may have been pushed to make way for Thiam or because the board chose not to buy AIG's Asian assets last year.
Pru's share price has leapt in the last week from 250p to around 340p after announcing operating profit for 2008 on an EEV basis was up by 17 per cent to £2.9bn. On an IFRS basis, operating profit increased by 12 per cent to £1.3bn.
The firm's capital position was £1.7bn at year-end after it dipped into its with-profits inherited estate to use £300m. The FSA will allow the firm to use more of its orphan cash, which was valued at £1.7bn at the end of 2008.
This capital position translates to a 162 per cent solvency ratio. Pru put an additional £770m aside last year to boost its credit reserves to £1.4bn against the £15bn corporate bond portfolio which backs its annuity book.
Pru has raised its dividend by 5 per cent, setting a final dividend of 12.9p which brings the full-year dividend to 18.9p.
Confirming it was interested in buying AIG's AIA assets but pulled out, Tucker said in the call: "We did not submit a bid. We could not find an effective route so we withdrew from the process."
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